Steven Spielberg made a new movie: Lincoln.
It tells us that the civil war was about slavery.
I think that was just a false flag.
It was, of course, a trick of the Power Elite ( the English bankers, mainly) to weaken an upcoming and not-under-control-yet America.
Just as WW1 was a way to weaken an upcoming and not-under-control-yet Germany.
Ellen H. Brown explained it all in detail:
(Note: the 'Wizzard of Oz" was an allegory about the battle between the banks and the people. Brown uses these allegoric quotes in her book. It is confusing if you do not read the whole book.)
Chapter 8
SCARECROW WITH A BRAIN:
LINCOLN FOILS THE BANKERS
“With the thoughts you’d be thinkin’,
“You could be another Lincoln,
“If you only had a brain . . . .”
–
Dorothy to the Scarecrow (1939 film)
Like
the Scarecrow who wound up ruling Oz, Abraham
Lincoln
went from hayseed to the top of his class by sheer
native
wit and determination, epitomizing the American dream. Following
in
the footsteps of Andrew Jackson, he rose from the backwoods
to
the Presidency without ever going to college. Lincoln’s
mother
could barely read. Like Jackson, Lincoln risked life and limb
battling
the Money Power; but the two Presidents had quite different
ideas
about how it should be done. Jackson had captured the popular
imagination
by playing on the distrust of big banks and foreign bankers;
but
in throwing out the national bank and its foreign controllers,
he
had thrown out Hamilton’s baby with the bath water, leaving the
banks
in unregulated chaos. There was now no national currency.
Banks
printed their own notes and simply had to be trusted to redeem
them
in specie (or gold bullion). When trust faltered, there would be a
run
on the bank and the bank would generally wind up closing its
doors.
Bank-fed speculation had collapsed much of the factory system;
and
federal support for road, canal and railway construction
was
halted, halting the pioneer settlement of the West along with it.
Lincoln
was only 24 when he joined the fight as an Illinois state
legislator
to continue the pioneering internal improvements begun by
Henry
Clay and the National Republicans. The National Republicans
were
now called “Whigs” after the British Whigs, the party in opposition
to
the King. Jackson had taken such unprecedented powers to
himself
that he had come to be called “King Andrew,” making the
American
opposition party Whigs by extension. The “Illinois Improvement
Program”
of Lincoln’s home state centered on construction of
the
Illinois-Michigan canal and a 3,000-mile railroad system. The result
was
an unbroken transportation line from the Hudson River to
the
Great Lakes and the Mississippi River. Lincoln also joined the
movement
to restore the country’s financial, industrial and political
independence
by restoring a national bank and a national currency.1
When
the Whig Party disintegrated over the question of slavery,
Lincoln
joined the Republican Party, which was created in 1854 to
oppose
the expansion of slavery into Kansas. It opposed the political
control
exerted by southern slave owners over the national government;
maintained
that free-market labor was superior to slavery; promised
free
homesteads to farmers; and advanced a progressive vision
emphasizing
higher education, banking, railroads, industry and cities.2
Lincoln
became the first Republican candidate to be elected President.
Both
Jackson and Lincoln were targets of assassination attempts,
but
for Lincoln they started before he was even inaugurated. He had
to
deal with treason, insurrection, and national bankruptcy within
the
first days of taking office. Considering the powerful forces arrayed
against
him, his achievements in the next four years were nothing
short
of phenomenal. His government built and equipped the largest
army
in the world, smashed the British-financed insurrection, abolished
slavery,
and freed four million slaves. Along the way, the country
managed
to become the greatest industrial giant the world had ever
seen.
The steel industry was launched, a continental railroad system
was
created, the Department of Agriculture was established, a new
era
of farm machinery and cheap tools was promoted, a system of
free
higher education was established through the Land Grant College
System,
land development was encouraged by passage of a Homestead
Act
granting ownership privileges to settlers, major government
support
was provided to all branches of science, the Bureau of Mines
was
organized, governments in the Western territories were established,
the
judicial system was reorganized, labor productivity increased by
50
to 75 percent, and standardization and mass production was
promoted
worldwide.
How
was all this accomplished, with a Treasury that was
completely
broke and a Congress that hadn’t been paid themselves?
As
Benjamin Franklin might have said, “That is simple.” Lincoln
tapped
into the same cornerstone that had gotten the impoverished
colonists
through the American Revolution and a long period of
internal
development before that: he authorized the government to
issue
its own paper fiat money.
National control was reestablished
over
banking, and the economy was jump-started with a 600 percent
increase
in government spending and cheap credit directed at
production.3
A century later, Franklin Roosevelt would use the same
techniques
to pull the country through the Great Depression; but
Roosevelt’s
New Deal would be financed with borrowed money.
Lincoln’s
government used a system of payment that was closer to the
medieval
tally. Officially called United States Notes, these nineteenth
century
tallies were popularly called “Greenbacks” because they were
printed
on the back with green ink (a feature the dollar retains today).
They
were basically just receipts acknowledging work done or goods
delivered,
which could be traded in the community for an equivalent
value
of goods or services. The Greenbacks represented man-hours
rather
than borrowed gold. Lincoln is quoted as saying, “The wages of
men should be recognized as more important than the wages of money.”
Over
400 million Greenback dollars were printed and used to pay
soldiers
and government employees, and to buy supplies for the war.
The
Greenback system was not actually Lincoln’s idea, but when
pressure
grew in Congress for the plan, he was quick to endorse it.
The
South had seceded from the Union soon after his election in 1860.
To
fund the War between the States, the Eastern banks had offered a
loan
package that was little short of extortion – $150 million advanced
at
interest rates of 24 to 36 percent. Lincoln knew the loan would be
impossible
to pay off.4 He took the revolutionary approach because
he
had no other real choice. The government could either print its
own
money or succumb to debt slavery to the bankers.
The Wizard Behind Lincoln’s Curtain
Lincoln’s
economic advisor was Henry Carey, the son of Matthew
Carey,
the printer and publisher mentioned earlier who was tutored
by
Benjamin Franklin and tutored Henry Clay. Clay was the leader of
the
Philadelphia-based political faction propounding the “American
system”
of economics. In the 1920s, historian Vernon Parrington called
Henry
Carey “our first professional economist.” Thomas DiLorenzo,
a
modern libertarian writer, has called him “Lincoln’s (and the
Republican
Party’s) economic guru.” Carey was known around the
world
during the Civil War and its aftermath, and his writings were
translated
into many European and Asian languages.
According
to Parrington, Carey began his career as a classical
laissez-faire economist
of the British school; but he came to believe that
American
industrial development was being held back by a false
financial
policy imposed by foreign financiers. To recognize only gold
bullion
as money gave the bankers who controlled the gold a lock on
the
money supply and the economy. The price of gold was established
in
a world market, and the flow of bullion was always toward the
great
financial centers that were already glutted with it. To throw the
world’s
money into a common pool that drained into these financial
capitals
was to make poorer countries the servants of these hubs. Since
negative
trade balances were settled in gold, gold followed the balance
of
trade; and until America could build up an adequate domestic
economy,
its gold would continue to drain off, leaving too little money
for
its internal needs.
Carey
came to consider “free trade” and the “gold standard” to
be
twin financial weapons forged by England for its own economic
conquest.
His solution to the gold drain was for the government to
create
an independent national currency that was non-exportable,
one
that would remain at home to do the country’s own work. He
advocated
a currency founded on “national credit,” something he
defined
as “a national system based entirely on the credit of the government
with
the people, not liable to interference from abroad.” Like
the
wooden tally, this paper money would simply be a unit of account
that
tallied work performed and goods delivered. Carey also supported
expanding
the monetary base with silver.5
Carey’s
theories were an elaboration of the “American system”
propounded
by Henry Clay and the National Republican Party. Their
platform
was to nurture local growth and development using local
raw
materials and local money, freeing the country from dependence
on
foreign financing. Where Jackson’s Democratic Party endorsed
“free
trade,” the National Republican Party sought another sort of
freedom,
the right to be free from exploitation by powerful foreign
financiers
and industrialists. Free traders wanted freedom from government.
Protectionists
looked to the
government to keep them free
from
foreign marauders. Clay’s protectionist platform included:
•
Government regulation of banking and credit to deter speculation
and
encourage economic development;
•
Government support for the development of science, public
education,
and national infrastructure;i
•
Regulation of privately-held infrastructure to ensure it met the
nation’s
needs;
•
A program of government-sponsored railroads, and scientific and
other
aid to small farmers;
•
Taxation and tariffs to protect and promote productive domestic
activity;
and
•
Rejection of class wars, exploitation and slavery, physical or economic,
in
favor of a “Harmony of Interests” between capital and
labor.6
Lincoln
also endorsed these goals. He eliminated slavery, established
a
national bank, and implemented and funded national education,
national
transportation, and federal development of business and
farming.
He also set very high tariffs. He made this common-sense
observation:
I
don’t know much about the tariff, but I know this much: When
we
buy manufactured goods abroad we get the goods and the
foreigner
gets the money. When we buy the manufactured goods
at
home, we get both the goods and the money.
The Legal Tender Acts and the Legal Tender Cases
The
Greenback system undergirded Lincoln’s program of domestic
development
by providing a much-needed national paper
money
supply.
After Jackson had closed the central bank, the only paper
money
in circulation were the banknotes issued privately by individual
state
banks; and they were basically just private promises to pay later
in
hard currency (gold or silver). The Greenbacks, on the other hand,
were currency.
They were “legal tender” in themselves, money that
did
not have to be repaid later but was “as good as gold” in trade.
Like
metal coins, the Greenbacks were permanent money that could
continue
to circulate in their own right. The Legal Tender Acts of
i
Infrastructure is defined as “the set of interconnected structural elements that
provide
the framework for supporting the entire structure.” In a country, it consists
of
the basic facilities needed for the country’s functioning, providing a
public
framework under which private enterprise can operate safely and efficiently.
1862
and 1863 made all the “coins and currency” issued by the U.S.
Government
“legal tender for all debts, public and private.” Government-
issued
paper notes were made a legal substitute for gold and
silver,
even for the payment of pre-existing debts.
In
the twentieth century, the Legal Tender Statute (31 U.S.C.
Section
5103) applied this definition of “legal tender” to Federal Reserve
Notes;
but it was an evident distortion of the intent of the original
Acts,
which made only currency issued by the United States Government
legal
tender. Federal Reserve Notes are issued by the Federal Reserve,
a
private banking corporation; but that rather obvious discrepancy
was
slipped past the American people with the smoke-and-mirrors
illusion
that the Federal Reserve was actually federal.
Did the Greenbacks Cause Price Inflation?
Lincoln’s
Greenback program has been blamed for the price inflation
occurring
during the Civil War, but according to Irwin Unger in
The
Greenback Era (1964): “It is now clear that inflation would have
occurred
even without the Greenback issue.”7 War is always an inflationary
venture.
What forced prices up during the Civil War was
actually
a severe shortage of goods. Zarlenga quotes historian J. G.
Randall,
who observed in 1937:
The threat of inflation was more effectively curbed during the
Civil
War than during the First World War. Indeed as John K. Galbraith
has
observed, “it is remarkable that without rationing, price
controls,
or central banking, [Treasury Secretary] Chase could
have
managed the federal economy so well during the Civil
War.”8
Greenbacks
were not the only source of funding for the Civil War.
Bonds
(government I.O.U.s) were also issued, and these too increased
the
money supply, since the banks that bought the bonds were also
short
of gold and had no other way of paying for the bonds than with
their
own newly-issued banknotes. The difference between the government-
issued
Greenbacks and the bank-issued banknotes was that
the
Greenbacks were debt-free legal tender that did not have to be
paid
back. As Thomas Edison reasonably observed in an interview
reported
in The New York Times in 1921:
If
the Nation can issue a dollar bond it can issue a dollar bill.
The
element that makes the bond good makes the bill good also.
The
difference between the bond and the bill is that the bond
lets
the money broker collect twice the amount of the bond and
an
additional 20%. Whereas the currency, the honest sort
provided
by the Constitution pays nobody but those who
contribute
in some useful way. It is absurd to say our Country
can
issue bonds and cannot issue currency. Both are promises to
pay, but one fattens the usurer and the other helps the People.
The
Greenbacks did lose value as against gold during the war, but
this
was to be expected, since gold was a more established currency
that
people naturally preferred. Again the problem for the Greenback
was
that it had to compete with other forms of currency. People remained
suspicious
of paper money, and the Greenback was not accepted
for
everything. Particularly, it could not be used for the
government’s
interest payments on its outstanding bonds. Zarlenga
notes
that by December 1865, the Greenback was still worth 68 cents
to
one gold dollar, not bad under the circumstances. Meanwhile, the
Confederates’
paper notes had become devalued so much that they
were
worthless. The Confederacy had made the mistake of issuing
fiat
money that was not legal
tender but was only a bond or promise
to
pay after the War. As the defeat of the Confederacy became more
and
more certain, its currency’s value plummeted.9
In
1972, the United States Treasury Department was asked to
compute
the amount of interest that would have been paid if the $400
million
in Greenbacks had been borrowed from the banks instead.
According
to the Treasury Department’s calculations, in his short tenure
Lincoln
saved the government a total of $4 billion in interest, just
by
avoiding this $400 million loan.10
Chapter 9
LINCOLN LOSES THE BATTLE
WITH THE MASTERS
OF EUROPEAN FINANCE
“When she knows you are in the country of the Winkies she will
find
you, and make you all her slaves.”
“Perhaps not,” said the Scarecrow, “for we mean to destroy her.”
“Oh, that is different,” said the Guardian of the Gates. “No one
has ever destroyed her before, so I naturally thought she would
make
slaves of you, as she has of the rest. But take care. She is
wicked and
fierce, and may not allow you to destroy her.”
– The Wonderful Wizard of Oz,
“The Search for the Wicked Witch”
The
Confederacy was not the only power that was bent on
destroying
Lincoln’s Union government. Lurking behind the
curtain
pulling the strings of war were powerful foreign financiers.
Otto
von Bismarck, Chancellor of Germany in the second half of the
nineteenth
century, called these puppeteers “the masters of European
finance.”
He wrote:
I
know of absolute certainty, that the division of the United States
into
federations of equal force was decided long before the Civil
War
by the high financial powers of Europe. These bankers
were
afraid that the United States, if they remained in one block
and
as one nation, would attain economic and financial
independence,
which would upset their financial domination
over
Europe and the world. Of course, in the “inner circle” of
Finance,
the voice of the Rothschilds prevailed. They saw an
opportunity
for prodigious booty if they could substitute two
feeble
democracies, burdened with debt to the financiers, . . . in
place
of a vigorous Republic sufficient unto herself. Therefore,
they
sent their emissaries into the field to exploit the question of
slavery
and to drive a wedge between the two parts of the Union.
.
. . The rupture between the North and the South became inevitable;
the masters of European finance employed all their forces to bring
it
about and to turn it to their advantage.1
The
European bankers wanted a war that would return the United
States
to its colonial status, but they were not necessarily interested in
preserving
slavery. Slavery just meant that the owners had to feed
and
care for their workers. The bankers preferred “the European plan”
–
capital could exploit labor by controlling the money supply, while
letting
the laborers feed themselves. In July 1862, this ploy was
revealed in a
notorious
document called the Hazard Circular, which was circulated
by
British banking interests among their American banking counterparts.
It
said:
Slavery
is likely to be abolished by the war power and chattel
slavery
destroyed. This, I and my European friends are glad of,
for
slavery is but the owning of labor and carries with it the care of
the laborers, while the European plan, led by England, is that
capital
shall control labor by controlling wages. This can be done by
controlling the money. The great debt that capitalists
will see to it
is
made out of the war, must be used as a means to control the
volume
of money. To accomplish this, the bonds must be used as
a banking basis. . . . It will not do to allow the greenback, as it is
called, to circulate as money any length of time, as we cannot
control
that.2
The
system the bankers wanted to preserve was what Henry Clay
and
Henry Carey had called the “British system,” with its twin
weapons
of “free trade” and the “gold standard” keeping the less
industrialized
countries in a colonial state, supplying raw materials
to
Britain’s factories. The American South had already been subjugated
in
this way, and the bankers had now set their sights on the North, to
be
reeled in with usurious war loans; but Lincoln had refused to take
the
bait. The threat the new Greenback system posed to the bankers’
game
was reflected in an editorial that is of uncertain origin but was
reportedly
published in the The London Times in 1865. It warned:
[I]f
that mischievous financial policy, which had its origin in the
North
American Republic, should become indurated down to a
fixture,
then that Government will furnish its own money without
cost.
It will pay off debts and be without a debt. It will have all
the
money necessary to carry on its commerce. It will become
prosperous
beyond precedent in the history of the civilized
governments
of the world. The brains and the wealth of all
countries
will go to North America. That government must be
destroyed,
or it will destroy every monarchy on the globe.3
Bismarck
wrote in 1876, “The Government and the nation escaped
the
plots of the foreign financiers. They understood at once, that the
United
States would escape their grip. The death of Lincoln was
resolved
upon.”4 Lincoln was assassinated in 1865.
The Worm in the Apple:
The National Banking Act of 1863-64
The
European financiers had failed to trap Lincoln’s government
with
usurious war loans, but they achieved their ends by other means.
While
one faction in Congress was busy getting the Greenbacks issued
to
fund the war, another faction was preparing a National Banking
Act
that would deliver a monopoly over the power to create the nation’s
money
supply to the Wall Street bankers and their European affiliates.
The
National Banking Act was promoted as establishing safeguards
for
the new national banking system; but while it was an important
first
step toward a truly national bank, it was only a compromise with
the
bankers, and buried in the fine print, it gave them exactly what
they
wanted. A private communication from a Rothschild investment
house
in London to an associate banking firm in New York dated June
25,
1863, confided:
The
few who understand the system will either be so interested
in
its profits or so dependent upon its favors that there will be
no
opposition from that class while, on the other hand, the great
body
of people, mentally incapable of comprehending . . . will
bear
its burdens without complaint.5
The
Act looked good on its face. It established a Comptroller of
the
Currency, whose authority was required before a National Banking
Association
could start business. It laid down regulations covering
minimum
capitalization, reserve requirements, bad debts, and
reporting.
The Comptroller could at any time appoint investigators
to
look into the affairs of any national bank. Every bank director had
to
be an American citizen, and three-quarters of the directors of a
bank
had to be residents of the State in which the bank did business.
Interest
rates were limited by State usury laws; and if no laws were in
effect,
then to 7 percent. Banks could not hold real estate for more
than
five years, except for bank buildings. National banks were not
allowed
to circulate notes they printed themselves. Instead, they had
to
deposit U.S. bonds with the Treasury in a sum equal to at least onethird
of
their capital. They got government-printed notes in return.
So
what was the problem? Although the new national banknotes
were
technically issued by the Comptroller of the Currency, this was
just
a formality, like the printing of Federal Reserve Notes by the Bureau
of
Engraving and Printing today. The currency bore the name of the
bank
posting the bonds, and it was issued at the bank’s request. In
effect,
the National Banking Act authorized the bankers to issue and
lend
their own paper money. The banks “deposited” bonds with the
Treasury,
but they still owned the bonds; and they immediately got
their
money back in the form of their own banknotes. Topping it off,
the
National Banking Act effectively removed the competition to these
banknotes.
It imposed a heavy tax on the notes of the state-chartered
banks,
essentially abolishing them.6 It also curtailed competition from
the
Greenbacks, which were limited to specific issues while the bankers’
notes
could be issued at will. Treasury Secretary Salmon P. Chase
and
others complained that the bankers were buying up the Greenbacks
with
their own banknotes. Zarlenga cites a historian named Dewey,
who
wrote in 1903:
The
banks were accused of absorbing the government notes as
fast
as they were issued and of putting out their own notes in
substitution,
and then at their convenience converting the notes
into
bonds on which they earned interest [in gold].7
The
government got what it needed at the time – a loan of
substantial
sums for the war effort and a sound circulating currency
for
an expanding economy – but the banks were the real winners.
They
not only got to collect interest on money of which they still had
the
use, but they got powerful leverage over the government as its
creditors.
The Act that was supposed to regulate the bankers wound
up
chartering not one but a whole series of private banks, which all
had
the power to create the currency of the nation.
The
National Banking Act was recommended to Congress by Treasury
Secretary
Chase, ironically the same official who had sponsored
the
Greenback program the Act effectively eliminated. In a popular
1887
book called Seven Financial Conspiracies That Have Enslaved
the
American People, Sarah Emery wrote that Chase acquiesced only
after
several days of meetings and threats of financial coercion by bank
delegates.8
He is quoted as saying later:
My
agency in procuring the passage of the National Bank Act
was
the greatest financial mistake of my life. It has built up a
monopoly
that affects every interest in the country. It should be
repealed.
But before this can be accomplished, the people will
be
arrayed on one side and the banks on the other in a contest
such
as we have never seen in this country.9
Although
Lincoln was assassinated in 1865, it would be another
fifty
years before the promise of his debt-free Greenbacks were erased
from
the minds of a people long suspicious of the usury bankers and
their
gilded paper money. The “Gilded Age” – the period between the
Civil
War and World War I – was a series of battles over who should
issue
the country’s currency and what it should consist of.
Skirmishes in the Currency Wars
Chase
appeared on the scene again in 1869, this time as Chief
Justice
of the Supreme Court. He wrote the opinion in Hepburn v.
Griswold,
75 U.S. 603, holding the Legal Tender Acts to be unconstitutional.
Chase
considered the Greenbacks to be a temporary war
measure.
He wrote that the Constitution prohibits the States from
passing
“any . . . law impairing the obligation of contracts,” and that
to
compel holders of contracts calling for payment in gold and silver
to
accept payment in “mere promises to pay dollars” was “an unconstitutional
deprivation
of property without due process of law.”
In
1871, however, with two new justices on the bench, the Supreme
Court
reversed and found the Legal Tender Acts constitutional.
In
the Legal Tender cases (Knox v. Lee, 79 U.S. 457, 20 L.Ed. 287; and
Juilliard
v. Greenman, 110 U.S. 421, 4 S.Ct. 122, 28 L.Ed. 204), the
Court
declared that Congress has the power “to coin money and regulate
its
value” with the objects of self-preservation and the achievement
of
a more perfect union, and that “no obligation of contract can
extend
to the defeat of legitimate government authority.”
In
1873, an Act the Populists would call the “Crime of ’73” eliminated
the
free coinage of silver. Like when King George banned the
use
of locally-issued paper scrip a century earlier, the result was “tight”
money
and hard times. A bank panic followed, which hit the western
debtor
farmers particularly hard.
In
1874, the politically powerful farmers responded by forming
the
Greenback Party. Their proposed solution to the crisis was for the
government
to finance the building of roads and public projects with
additional
debt-free Greenbacks, augmenting the money supply and
putting
the unemployed to work, returning the country to the sort of
full
employment and productivity seen in Benjamin Franklin’s time.
The
Greenbacks could also be used to redeem the federal debt. Under
the
“Ohio Idea,” all government bonds not specifying payment in gold
or
silver would be repaid in Greenbacks.10 The plan was not adopted,
but
the Scarecrow had shown he had a brain. The Timid Lion had
demonstrated
the courage and the collective will to organize and make
a
difference.
In
1875, a Resumption Act called for redemption by the Treasury
of
all Greenbacks in “specie.” The Greenbacks had to be withdrawn
and
replaced with hard currency, producing further contraction of
the
money supply and deeper depression.
In
1878, the Scarecrow and the Tin Woodman joined forces to
form
the Greenback-Labor Party. They polled over one million votes
and
elected 14 Representatives to Congress. They failed to get a new
issue
of Greenbacks, but they had enough political clout to stop further
withdrawal
of existing Greenbacks from circulation. The Greenbacks
then
outstanding ($346,681,016 worth) were made a permanent
part
of the nation’s currency.
In
1881, James Garfield became President. He boldly took a stand
against
the bankers, charging:
Whosoever
controls the volume of money in any country is
absolute
master of all industry and commerce . . . And when
you
realize that the entire system is very easily controlled, one
way
or another, by a few powerful men at the top, you will not
have
to be told how periods of inflation and depression originate.
President
Garfield was murdered not long after releasing this
statement,
when he was less than four months into his presidency.
Depression
deepened, leaving masses of unemployed to face poverty
and
starvation at a time when there was no social security or
unemployment
insurance to act as a safety net. Produce was left to
rot
in the fields, because there was no money to pay workers to harvest
it
or to buy it with when it got to market. The country was facing
poverty
amidst plenty, because there was insufficient money in
circulation
to keep the wheels of trade turning. The country sorely
needed
the sort of liquidity urged by Lincoln, Carey and the
Greenbackers;
but the bankers insisted that allowing the government
to
print its own money would be dangerously inflationary. That was
their
argument, but critics called it “humbuggery” . . . .
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